Civil / Property

Documentation

Employee - Employer

What is cheque bounce?

Cheque bounces when the bank doesn’t honour a payment. Some common reasons are incorrect signatures, mismatch of figures written on the cheque (in figures and words) and overwriting. These issues are minor and can be solved without the court’s intervention.

However, the major cause of concern is when a cheque bounces due to insufficient funds in the bank account of the person who gives the cheque.

What to do in a cheque bounce case?

Cheque Bounce is defined under Section- 138 of the Negotiable instruments Act, 1881. If you have received a bounced cheque then you have 2 options.

You can send the person a notice and if you do not receive any response within 15 days then,

You can send them a Legal Notice, by filing a complaint in Court.

What should be in the Demand Notice?

You can send them a Legal Notice, by filing a complaint in Court.

You must clearly state the value of debt and the legal consequences arising due to failure in payment

You must provide information regarding cheque bounce as returned by the bank

You must demand the payment of the amount to be paid within 15 days of receiving the Notice

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